(A) Approval of issuance. The City Council shall adopt an ordinance authorizing the issuance of bonds.
(B) Method of sale. The city will select the method of sale which best fits the type of bonds being sold, market conditions, and the desire to structure bond maturities to enhance the overall performance of the debt portfolio. The general methods for the sale of municipal bonds include:
(1) Competitive sale. Bonds are marketed to a wide audience of investment banking firms (underwriters). Their bids are submitted electronically at a specific time and the bonds are sold to the bidder proposing the lowest true interest cost (TIC).
(2) Negotiated sale. The city will negotiate all rates and terms of the sale with an underwriter who is selected in advance of the bond sale.
(3) Private placement. The city sells its bonds to a limited number of sophisticated investors, but not the general public.
(C) Selection and use of professional service providers. The city will procure professional services as needed to successfully authorize, structure, and market bonds due to the complex nature of the transactions. These professional service providers may include arbitrage consultants, bond counsel, disclosure counsel, escrow agents, financial advisors, paving agents, underwriters, and verification agents.
(1) Financial Advisor. The Financial Advisor will recommend the financing structure; prepare and review preliminary and official statements; review ordinances concerning the authorization and award of financing: assist the city in developing and presenting information to rating agencies; provide the electronic bidding platform; and provide assistance with the closing and delivery of securities. To ensure independence, the Financial Advisor will not bid on or underwrite any city bond issues on which it is advising.
(2) Bond Counsel involvement. Bond Counsel will prepare and review the ordinances authorizing and awarding the bonds; provide a written opinion regarding the validity and binding effect of the bonds; determine the Federal tax status of interest on any bonds: and prepare electronically bound official transcripts related to the authorization, offering, sale and delivery of the bond issue. The city will also seek assistance from Bond Counsel on other types of debt financing, as well as on any questions involving federal tax or arbitrage law. To ensure independence, Bond Counsel will not simultaneously represent any other party involved in the financing unless a conflict waiver is obtained from the city.
(D) Credit ratings. The city may seek a rating on all new bond issues being sold in the public market-municipal bond ratings determine the amount of investment risk and interest cost on bonds issued to finance city projects. These ratings assess several factors including, but not limited to, current state of the economy, debt structure, financial condition, and management practices. The city will use both formal and informal methods to disseminate information and communicate with the rating agencies as follows:
(1) Full disclosure of the financial condition of the city on an annual basis;
(2) Formal presentation on a regular basis covering economic, financial, operational, and other issues that impact the city's credit;
(3) Disclosure of financial events that may impact the city's credit;
(4) Dissemination of the Comprehensive Annual Financial Report (CAFR); and
(5) Distribution of any documents pertaining to the sale of bonds.
(Ord. 19-012, passed 5-2-19)